magicslr, There are many charts out there on the net at your fingertips. Start with only one on SI.
In TA example of PTEK, simply type in PTEK on SI, hit enter, and click on 100 Day Chart. It is a snapshot of stock's "technical health" over this period of time. Ask yourself questions: what do I see? Is the stock moving up, down or sideways? What are the "support areas" (floor level, lower parallel line) where the stock has traded most? In this case it is 9 1/2 - 10 1/4 area from middle Feb thru March and more recently above 13 1/4 on a close since April 10. You could still pierce through support 13 1/4 on an intraday basis down to this 12 1/4 # I mentioned, but you need leeway or wiggle room lower since Market-makers look at same charts as experienced TA guys and tries to take them out (get them to sell their shares) by running through support levels only to have it snap back up that same day. Think of 9 1/2 area as the cement floor in basement of your house and 12 1/4 as base. On upside, you look at chart and ask "where does it seem to run into buzz-saw most of time and retreating below this level after piercing above it for potentially few to several days? Draw a straight parallel line with ruler since April 10 and you come up with about 15 3/4 to 16 area. This is an "art" not science and you could dedeuce lower or higher #. But I know that they will pierce this "resistance" interday to upside and hence 16 1/2. Why do I know this? I have seen it happen too many times. Sometimes not right away and other times higher than the # (16 1/2). The 15-17 1/2 area is synonomous with basing pattern in Feb-Mar run mentioned earlier. This has just been my experience more often than not. New support and resistance levels develop before taking off again (to 22 1/2 area). It doesn't always go this way as sometime stock runs away from you, by going higher and higher and higher. You want it lower and keep hoping it will come back down tothe price you are willing to pay for it, but the stock does not do what you want it to do - go lower. Obviously the "Net" stocks would be stocks running away from you when they were taking off. They just kept getting bid-up to the moon. Now gravity takes over.
Configuration is simply a stocks "technical picture" that I have seen in similar situations over and over again. It has simply pulled back to lower band of support. Hence, any major market rally exudes enthusiasm and this will get taken for quick technical ride. Not always, but more often than not. Also, any noteworthy increase in volume from its 30 day average may be quick start of something to this 16 1/2 intraday.
I used overhead supply too loosely here. But if you now click on 60 week chart you will see where volume spikes. This is where the majority of shares are changing hands and more often than not where mass shareholders need to get back to break-even who bought shares only once.
For now, I hope this helps. Give yourself a few weeks to get acclimated to the thread, get to learn some market lingo and then dive in with more questions.
Once I get my support and resistance index parameters all set up and get this thing on cruise control, you can fire away with more detailed questions.
Thanks in advance for your patience. Best Regards. J.T. |
